86th Texas Legislature convenes

It’s been a busy start to the 86th Legislative Session, which kicked off Jan. 8 with the swearing-in of Texas House and Senate Members. The first day was one of pomp and ceremony, with friends and family members filling the chamber galleries and accompanying legislators on the chamber floors.

Sen. Jane Nelson (R-Flower Mound) gaveled in the Texas Senate, standing in at the request of Lt. Gov. Dan Patrick who “was called by the White House for an important meeting today to discuss some issues that are critical to Texas.” The Senate unanimously elected Sen. Kirk Watson (D-Austin) as the President Pro Tempore for the Senate, serving as governor on occasions when both the governor and lieutenant governor are out of the state.

In the Texas House, newly appointed Secretary of State David Whitley presided until the election of the House Speaker, a member chosen by his colleagues to preside over the House. Rep. Dennis Bonnen (R-Angleton) was unanimously elected the 75th Speaker of the House by a record vote of 147-0 (there are three vacant seats due to recent resignations). Bonnen replaces Joe Straus, who served as Speaker for the last decade. Bonnen was first elected to the Legislature at the age of 24 and is serving his 12th term in office. In his acceptance speech, Bonnen outlined his priorities: public school finance reform, Texas children, human trafficking, property tax reform and health care.

Also on the first day, both the House and Senate adopted governing rules, which will make changes to legislative committees (we anticipate that both House and Senate committees will be announced by the end of January).

In the Senate: The Committee on Agriculture, Water and Rural Affairs was changed to the Committee on Agriculture and reduced from seven to five members; the Committee on Criminal Justice was reduced from nine to seven members; a new Committee on Property Tax with five members was established; and a new Committee on Water and Rural Affairs with seven members was created.

The House increased the membership of 16 committees and decreased the membership of four committees. Some committees saw shifts in the list of issues within their jurisdictions, which will impact bills they will consider. Of interest to TAD and the dairy industry, the Economic and Small Business Development Committee was eliminated and most of its duties were transferred to the International Relations and Economic Development Committee. Jurisdiction of the Land and Resource Management Committee was expanded to include the creation, modification and regulation of municipal utility districts.

Also during the first week of the legislative session, the two chambers met in joint session to officially canvas the votes for governor and lieutenant governor, a formality that paved the way for the Jan. 15 inauguration.

On Jan. 9, Gov.Greg Abbott, Lt. Gov. Dan Patrick and Speaker Dennis Bonnen held a joint press conference to discuss their priorities for the 86th legislative session and reaffirm their commitment to work together to advance solutions to the challenges facing the state. Abbott said, “We are here today to send a very strong, profound and unequivocal message – that the governor, lieutenant governor and speaker are working in collaboration together on a very bold agenda that will be transformative for the state of Texas. The task ahead of us is clear – we must reform our school finance system, limit the growth of skyrocketing property taxes, and provide greater opportunities for every Texan.”

On the Agenda

While legislation can’t be considered until committees are appointed and start to meet, more than 1,100 bills have already been filed. TAD is tracking bills of interest to the Texas dairy industry, including bills concerning transportation, raw (unpasteurized) milk, immigration, water and taxes. Bills can be filed through March 8.

To read, search or follow specific bills, learn more about individual lawmakers, find other Capitol information, watch live or archived sessions of the Texas House or Senate or their committee meetings, visit the Texas Legislature Online.

Upcoming elections

While the Legislature is in session, legislative elections aren’t over yet. The House has three vacancies due to the resignations of Carol Alvarado (D-Houston) in House District 145, Joe Pickett (D-El Paso) in House District 79, and Justin Rodriguez (D-San Antonio) in House District 125. Abbott has called special elections for all three seats:

Jan. 29 to replace Alvarado, who resigned from the House on Dec. 21 when she was sworn in to the Texas Senate. Eight candidates – six Democrats, one Republican and one Libertarian – are on the ballot.

Jan. 19 to replace Pickett, who resigned from the House on Dec. 19 citing health reasons. Three candidates – two Democrats and one Republican – are on the ballot.

Feb. 12 to replace Rodriguez, who resigned from the House on Jan. 4 when he was appointed Bexar County Commissioner. Five candidates are running for the seat – four Democrats and one Republican.

Money in the bank

On the day before the Legislature convened, Comptroller Glenn Hegar released his revenue estimate for the remainder of fiscal 2019 and the upcoming 2020-21 biennium. Highlights of his estimates include:

Available Revenue– For 2020-21, the state can expect to have $119.1 billion in funds available for general-purpose spending, an 8.1 percent increase from the corresponding amount of funds available for the 2018-19 biennium.

Total Revenue– The $119.1 billion available for general-purpose spending represents 2020-21 total revenue collections of $121.5 billion in General Revenue-related (GR-R) funds, plus $4.2 billion in balances from 2018-19, less $6.3 billion reserved from oil and natural gas taxes for 2020-21 transfers to the Economic Stabilization Fund (aka Rainy Day Fund) and the State Highway Fund (SHF) and $211 million set aside to cover a shortfall in the state’s original prepaid tuition plan, the Texas Tomorrow Fund.

Tax Revenue– Tax revenues account for approximately 88 percent of the estimated $121.5 billion in total GR-R revenue in 2020-21. Sixty-two percent of GR-R tax revenue will come from net collections of sales taxes, after $5 billion is allocated to the SHF.

Other Revenue Sources– Other significant sources of General Revenue include motor vehicle sales and rental taxes; oil and natural gas production taxes; franchise taxes; insurance taxes; collections from licenses, fees, fines and penalties; interest and investment income; and lottery proceeds.

Federal Income– In addition to the GR-R funds, the state is expected to collect $88.7 billion in federal income as well as other revenues dedicated for specific purposes and therefore unavailable for general-purpose spending.

Other Revenue Sources– Revenue collections from all sources and for all purposes should total $265.6 billion.

Economic Stabilization (Rainy Day) Fund– Absent any appropriations by the Legislature, the ESF balance is expected to be $15.4 billion at the end of the 2020-21 biennium, below the ESF constitutional limit of an estimated $18.6 billion.

Hegar explained factors that he used to determine the estimate saying, “Following weak real gross state product growth of just 0.7 percent in fiscal 2017, the Texas economy rebounded and is estimated to have grown by 3 percent in 2018. We project growth to accelerate to 4 percent in fiscal 2019. Record oil production in the Permian Basin combined with solid growth in other economic sectors resulting from a robust national economic expansion has led to strong job creation and record low unemployment in Texas. As a result, tax collections in fiscal 2018 and early fiscal 2019 have exceeded previous expectations.”